HDTV Intenders to Significantly Impact High-Def DVD Battle

DALLAS, TX--(Marketwire - December 10, 2007) - According to research from The Diffusion Group,
close to one-third of non-HDTV households are interested in purchasing a
new HDTV in the next six months -- a very encouraging sign for HDTV
manufacturers and, by relation, high-def DVD manufacturers. More
interesting, perhaps, is that the same research found that the
characteristics of these "HDTV Intenders" vary widely from those of current
HDTV owners. HDTV Intenders tend to be younger, single, more ethnically
diverse, and have lower annual household incomes than current HDTV owners
-- in many respects more characteristic of mainstream consumers than the
early adopters who today own an HDTV.

While this trend could in theory benefit either Blu-ray or HD DVD, the data
suggests otherwise. Among HDTV Intenders who are likely to purchase a new
high-def DVD player in the next six months, 43% prefer HD DVD, 27% prefer
Blu-ray, and 30% are undecided.

"The strength of this preference and its correlation to mainstream
attributes are notable," states Michael Greeson, president and principal
analyst with The Diffusion Group. "Today's high-def DVD owner is likely an
early adopter with a knack for power gaming; most certainly
tech-sophisticates not at all mainstream in temperament. The next wave of
buyers is comprised of early mass-market consumers, a much larger segment
with a focus on practical considerations such as price. It is TDG's
opinion that the format which can best address the needs of mainstream
consumers will emerge as the winner of this format war."

TDG's research confirms this conclusion. When asked to characterize their
own "status" as technology consumers, High-Def DVD Owners are five times
more likely than Non-Owning High-Def DVD Intenders to see themselves as
early adopters. Conversely, Non-Owning High-Def DVD Intenders are almost
twice as likely as High-Def DVD Owners to view themselves as early
mass-market buyers.

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Non-Owning
High-Def DVD High-Def DVD
Intenders Owners
High-Def DVD Status & Tech Adopter Status (n = 293) (n = 517)
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I love technology and I am typically the
first to own the newest devices. 10.1% 51.3%
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I like being aware of new technology, but I
typically wait until the price starts coming
down and I know the product works well. 67.3% 37.8%
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By the time I purchase a new technology,
many people are already owners and the price
has dropped enough for me to be interested. 21.3% 22.2%
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I never buy "new" technologies, because by
the time I buy (or someone else buys it for
me), everyone else already has one and it is
no longer considered "new." 1.4% 9.9%
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As is the case with the diffusion of most new technologies, TDG believes
there will be several "waves" of high-def DVD buyers, each of which will be
motivated by different factors. The most immediate wave, which is expected
to be exhausted by early 2008, is comprised of the remaining early adopters
who have yet to buy a high-def DVD player and which (not surprisingly) show
a preference for Blu-ray. The second (and more sizable) wave will consist
of early mass-market consumers who, while less enthusiastic about
technology per se and very price sensitive, are more likely to favor HD DVD
(a conclusion grounded in TDG's latest primary research).

TDG recently fielded two separate primary research studies focused on
consumer interest in next-generation media platforms: the first, an October
2007 survey of 1,500 U.S. adult Internet users; the second, a November 2007
survey of 2,000 U.S. adult broadband users. This larger study is now being
offered for purchase by contacting Andy Tarczon at 469-287-8060.

About The Diffusion Group (TDG):

TDG is an analytics and advisory firm helping companies in the connected
home and broadband media markets. Using a unique think-tank approach that
blends executive-level consultants and in-depth market research, TDG
generates reasoned and pragmatic insights that help clients make
intelligent market decisions. TDG produces more than just research -- we
create Intelligence in Action®.